Download or read book Essays on Market Power and Price Strategy in the U S Dairy Industry written by Shengnan Fang and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation constitutes two essays discussing the market power and price strategy in the dairy industry, which historically played an important role in the U.S. agriculture sector. The first essay focuses on a merger case in the dairy industry. On April 1, 2009, Foremost Farms USA (referred to as Foremost Farms), a Wisconsin-based dairy producers' cooperative, sold its consumer products division, which included two dairy processing plants, to Dean Foods, and these plants produced distinct brands of milk. The United States Department of Justice (DOJ) expressed concern that this acquisition would have substantial anticompetitive effects in certain markets. Consistent with this view, in July 2011, the DOJ issued a final order requesting that Dean Foods divest one of the newly acquired plants. This essay empirically examines whether DOJ's concern, as well as its policy action, are supported by the data. The results suggest that, except for two package sizes of milk, Dean Foods jointly priced the newly acquired brands of milk along with its pre-existing milk brands, and such cooperative price-setting behavior is consistent with an anticompetitive effect. However, the magnitudes of the percentage increases in price-cost markups due to joint pricing are sufficiently small, suggesting that anticompetitive effects should not be of concern. In case of the divestiture period, we find that a subset of the products from the divested brand went back to being priced separately from Dean Food's milk products as required by DOJ's order. However, the magnitudes of the percentage decreases in price-cost markups are sufficiently small, suggesting that divestiture effects are negligible. Consumers' perception of the marginal quality difference between organic and conventional products allow firms to charge a price premium associated with the perceived quality difference, the organic price premium. The organic price premium is effectively consumers' willingness to pay (WTP) for the organic attribute. The second essay addresses the question of how the quantity of media coverage on organic dairy issues impacts the organic price premium for milk. We first use a theoretical model to illustrate how media information may influence the organic price premium. Our subsequent empirical analysis suggests, on average, consumers are willing to pay $1.19/gallon more for the organic attribute of milk, which corresponds to 19.07% of the mean price per gallon of organic milk. Second, we find evidence that the quantity of newspaper coverage on organic dairy issues significantly increases WTP for the organic feature of milk, but this impact follows an inverted-U curve with a diminishing marginal effect. Interestingly, TV and Radio news coverage of similar issues are not found to have a significant effect on WTP, which may be partly driven by survey evidence suggesting that consumers' main reason for listening to radio or watching TV is to be entertained rather than to be informed.
Download or read book Essays on Pricing and Policy in the U S Dairy Industry written by Charng-Jiun Yu and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The dairy industry is one of the most important components in U.S. economy. Milk production added substantial value to the agricultural sector. In 2017, U.S. dairy farmers produced 38.1 billion dollars worth of milk. On the consumption side, Americans on average consume 244 pounds of dairy products in a year. Despite the significance of the U.S. dairy industry, several important economic issues in pricing and policy are not studied. With the improvement in data quality over the past decade, there is an emerging opportunity for empirical studies to analyze the U.S. dairy industry and provide economic insights to a more general scope. My dissertation provides empirical analysis to understand the pricing and policy issues for producers, retailers, and consumers in the U.S. dairy industry. Specifically, in the following three chapters I study the relationship between market power and farm-retail price transmission, the impact of environmental regulations on dairy farm management, and the relationship between price and perceived quality in consumer choice of cheese products. In the first chapter, I seek to understand the impact of market competitiveness on the degree of asymmetric price transmission and associated welfare implications. I estimate a kinked Almost Ideal Demand System for fluid milk products in 18 U.S. metropolitan areas. By conducting an asymmetric price transmission test, I find that cities with less competitive food retailing tend to exhibit asymmetric price transmission. The degree of price asymmetry and associated welfare loss are decreasing in the market competitiveness. The welfare analysis suggests that the welfare loss due to asymmetric price transmission is large in terms of the percentage of milk expenditures. The potential is for substantially higher future welfare loss given the ongoing consolidation in food retailing industry. In the second chapter, I quantify the impact of the Clean Water Act (CWA) on farm waste management practices of U.S. dairy concentrated animal feeding operations (CAFOs). A double-hurdle model is employed to examine how dairy farmers adjust their practices in response to the major policy revision of the CWA in 2003. Using the 2000 and 2010 Agricultural Resource Management Survey data, I find that CAFO farmers who follow the management standards of the nutrient management plan (NMP) required by the CWA are more likely to implement manure storage after the policy revision. There are, however, no significant changes in storage capacity for those who have already adopted. Furthermore, CAFOs that fail to comply with NMPs did not make significant changes in storage capacity, land application of manure, and manure removal. The results suggest a heterogenous and limited impact of the CWA on waste management practices of dairy CAFOs. In the third chapter, I examine how prices affect consumers' perception of quality and consequently their product choices using individual consumers' purchase records in the U.S. cheese market. I hypothesize that price affects product choices by two channels: (i) a "pure price" effect directly affecting the purchase cost, and (ii) a "perceived quality" effect affecting the perceived product quality. In the empirical analysis, I complement the traditional mixed logit model with the conditions of purchasing behavior and utilize the Nielsen consumer panel and retail scanner data of the U.S. cheese markets from 2012 to 2014. The results suggest a strong perceived quality effect. With a 10% increase in the price of a cheese product, the corresponding choice probability would on average decrease by 5.4%, which consists of a 13.0% decrease due to higher purchase cost and a 7.6% increase driven by higher perceived quality. For approximately 10% of the cheese products, the ratios of the perceived quality elasticity to the total price elasticity are greater than 3.69; on the lower end, the ratios are lower than 0.24 for another 10% of the products. Such a large value is indicative of a large heterogeneity of the price impact on perceived quality across products. In addition, the impact of price on perceived varies across different types of households. Finally, I find that the perceived quality effect decreases with repeat purchases. These findings have significant implications for retailers' marketing strategy, government policy, and analysis of product competition
Download or read book Market Power and Policy in the U S Dairy Industry written by Byeong-Il Ahn and published by . This book was released on 2006 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Dairy Industry written by United States. Government Accountability Office and published by DIANE Publishing. This book was released on 2004 with total page 257 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Market power and policy in the United States dairy industry written by Byeong-Il Ahn and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Recent Dairy Policy Publications with Selected Annotations written by Suzanne L. Dash and published by . This book was released on 1984 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Dairy Industry written by United States. General Accounting Office and published by . This book was released on 2001 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Dairy Markets and Policy written by and published by . This book was released on 1995 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Marketing and Pricing of Milk and Dairy Products in the United States written by Kenneth W. Bailey and published by Wiley. This book was released on 2001-12-05 with total page 281 pages. Available in PDF, EPUB and Kindle. Book excerpt: How will the U.S. dairy industry look under deregulation? How has California become the nation's leading dairy producer? Why have consumers preferred the real thing over artificial dairy products? This book will help readers make sense of the American dairy business, whose complexities and eccentricities so often seem to defy understanding. On the brink of far-reaching changes in federal dairy policy, it gives a much-needed account of how market forces and government intervention drive the most regulated and complicated agricultural industry in the United States. The first comprehensive book on the topic,Marketing and Pricing of Milk and Dairy Products in the U.S. considers every aspect of this complicated puzzle. Looking at dairy products from milk and yogurt to butter, cheese, and ice cream, it explains supply and demand, dairy cooperatives, federal milk marketing orders and price supports, local and state regulations, and international trade. Finally, in a clear and compelling manner, the author proposes reforms that would benefit the dairy industry, especially a move toward less regulation.
Download or read book Milk price support program and other policies affecting the U S dairy industry written by National Commission on Dairy Policy (U.S.) and published by . This book was released on 1988 with total page 110 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Review of Farm to retail Pricing and Marketing Relationships in the U S Dairy Industry written by United States. Congress. House. Committee on Agriculture. Subcommittee on Livestock, Dairy, and Poultry and published by . This book was released on 1991 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effect of U S Dairy Deregulation on Farm Level Markets written by Maurice Albert Doyon and published by Sainte-Foy, Quebec : Groupe de recherche en économie et politique agricole, Université Laval. This book was released on 1998 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Factors that Affect the Supply and Demand Adjustment Processes in the U S Dairy Industry written by Chin-Hwa Sun and published by . This book was released on 1994 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Political Market Power Reflected in Milk Pricing Regulations written by Byeong-Il Ahn and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate revealed political market power reflected in the pattern of price discrimination by end use that is the hallmark of U.S. milk marketing orders. We show that the pattern of prices that would maximize producer profits, if producers operated a cartel with monopoly power in a regional market, is far above actual government-set price differentials between milk used for fluid products and that used for manufactured products. The pattern of actual price differentials is consistent with political welfare weights for producers relative to consumers that are small compared to the weights that would yield maximum producer profits.
Download or read book Estimating Market Power of U S Dairy Cooperatives in the Fluid Milk Market written by Metin Cakir and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A structural econometric model of vertical relationships is adopted to identify pricing behavior in the supply chain for fluid milk in the United States. The model consists of a system of equations that allows estimation of oligopoly power of dairy co-operatives and downstream firms, exploiting federal milk marketing order regulations to identify co-operatives' marginal cost. A key finding is that co-operatives use their market power to raise the farm price of milk by almost 9% above marginal cost, resulting in an income transfer of more than $600 million per year in markets regulated by federal milk marketing orders.
Download or read book Essays on Vertical Integration and Efficiency in the U S Dairy Industry written by Selvin Akkuş Clemens and published by . This book was released on 2013 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Essays on industrial organization of U S dairy markets written by Metin Cakir and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
